U-Haul Holding Company Announces $500 Million Private Placement of Senior Unsecured Notes

Rhea-AI Summary

U-Haul Holding Company (NYSE: UHAL, UHAL.B) has announced a $500 million private placement of senior unsecured notes. The offering consists of four tranches with a weighted average interest rate of 5.94%. The notes are structured as follows:

• Series A: $100 million at 5.86%, due August 21, 2032
• Series B: $100 million at 5.91%, due August 21, 2033
• Series C: $100 million at 5.95%, due August 21, 2034
• Series D: $200 million at 6.00%, due August 21, 2035

This issuance follows two previous private placements in fiscal 2022 and aims to provide fixed cost capital for U-Haul's growth and expansion of new locations. The notes are not registered under the Securities Act of 1933 and cannot be offered or sold in the United States without registration or exemption.

Positive

• Secured $500 million in fixed cost capital for growth and expansion
• Diversified debt structure with four tranches of notes
• Relatively low weighted average interest rate of 5.94% in current market conditions

Negative

• Increased long-term debt obligations
• Higher interest expenses may impact future profitability

Insights

Financial Analyst

U-Haul's $500 million private placement of senior unsecured notes is a significant move that strengthens its financial position. The weighted average interest rate of 5.94% is relatively competitive in the current market environment. This strategic debt issuance provides U-Haul with long-term, fixed-rate financing, which can be advantageous in a rising interest rate scenario.

The staggered maturity dates (2032-2035) of the four tranches demonstrate prudent debt management, allowing for better cash flow planning. This structure also mitigates refinancing risk by spreading out future repayment obligations. The funds raised will likely support U-Haul's expansion plans, potentially driving future revenue growth and market share gains in the moving and storage industry.

However, investors should monitor the company's debt-to-equity ratio and interest coverage ratio to ensure this additional debt doesn't overly burden the balance sheet. Overall, this move signals confidence in U-Haul's long-term growth prospects and financial stability.

Market Research Analyst

U-Haul's decision to raise $500 million through private placement indicates a bullish outlook on the moving and storage market. This substantial capital injection suggests the company anticipates continued strong demand for its services, likely driven by ongoing demographic shifts and migration patterns in the U.S.

The company's focus on expanding its locations aligns with changing consumer preferences for convenience and accessibility in the self-moving sector. This strategy could help U-Haul maintain its competitive edge against both traditional rivals and emerging players in the sharing economy.

However, investors should consider potential risks such as economic downturns or shifts in housing market dynamics that could impact demand for moving services. The success of this expansion will ultimately depend on U-Haul's ability to effectively deploy capital and capture market share in new locations while maintaining profitability.

RENO, Nev.--(BUSINESS WIRE)-- U-Haul Holding Company (NYSE: UHAL, UHAL.B), parent of U-Haul International, Inc., Oxford Life Insurance Company, Repwest Insurance Company and Amerco Real Estate Company, announced today that it has entered into a note purchase agreement to issue $500 million of fixed rate senior unsecured notes (the “Notes”) in a private placement offering with a weighted average interest rate of 5.94% as of the issuance date.

The senior notes consist of four tranches, three totaling $100 million each and another for $200 million. The Series A 5.86% Senior Notes are due August 21, 2032, the Series B 5.91% Senior Notes are due August 21, 2033, the Series C 5.95% Senior Notes are due August 21, 2034, and the Series D 6.00% Senior Notes are due August 21, 2035.

“We entered into our first two private placements in fiscal 2022 to provide fixed cost capital to help fund our growth in new locations,” stated Kevin Harte, Assistant Treasurer of U-Haul Holding Company. “This newest issuance assists with the expansion of the program.”

The notes have not been, and will not be, registered under the Securities Act of 1933 or the securities laws of any state or other jurisdiction and may not be offered or sold in the United States or any other jurisdiction absent registration or an exemption from the registration requirements of the Securities Act of 1933 and the applicable securities laws of any state or other jurisdiction. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities.

About U-Haul Holding Company

U-Haul Holding Company is the parent company of U-Haul International, Inc., Oxford Life Insurance Company, Repwest Insurance Company and Amerco Real Estate Company. U-Haul is in the shared use business and was founded on the fundamental philosophy that the division of use and specialization of ownership is good for both U-Haul customers and the environment.

About U-Haul

Since 1945, U-Haul has been the No. 1 choice of do-it-yourself movers, with a network of more than 23,000 locations across all 50 states and 10 Canadian provinces. U-Haul Truck Share 24/7 offers secure access to U-Haul trucks every hour of every day through the customer dispatch option on their smartphones and our patented Live Verify technology. Our customers' patronage has enabled the U-Haul fleet to grow to approximately 192,000 trucks, 138,700 trailers and 39,500 towing devices. U-Haul is the third largest self-storage operator in North America and offers 1,024,000 rentable storage units and 88.5 million square feet of self-storage space at owned and managed facilities. U-Haul is the largest retailer of propane in the U.S., and continues to be the largest installer of permanent trailer hitches in the automotive aftermarket industry. U-Haul has been recognized repeatedly as a leading "Best for Vets" employer and was recently named one of the 15 Healthiest Workplaces in America.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240822961952/en/

Sebastien Reyes

Director of Investor Relations

U-Haul Holding Company

(602) 263-6601

Sebastien_Reyes@uhaul.com

Source: U-Haul Holding Company

FAQ

What is the total value of U-Haul's (UHAL) recent private placement of senior unsecured notes?

U-Haul Holding Company (UHAL) announced a $500 million private placement of senior unsecured notes.

What is the weighted average interest rate for U-Haul's (UHAL) new senior unsecured notes?

The weighted average interest rate for U-Haul's (UHAL) new senior unsecured notes is 5.94%.

When are the maturity dates for U-Haul's (UHAL) new senior unsecured notes?

The maturity dates for U-Haul's (UHAL) new senior unsecured notes range from August 21, 2032 to August 21, 2035, with one series maturing each year.

What is the purpose of U-Haul's (UHAL) recent $500 million private placement?

U-Haul (UHAL) stated that the $500 million private placement is to provide fixed cost capital to help fund growth in new locations and expand their program.